RRR11: CHEMEX-stry, Practical Wisdom, Transforming Obstacles, Peru X U.S. Debt Swap, NBA o/u Tracker Pt.1
☕🧠💵🌄🤔💭🏀
I may have perfected my morning cup of coffee…
A couple of years ago, someone gifted me a CHEMEX drip coffeemaker. At the time, I wasn’t a serial pour-over coffee guy, but I had known from prior research and anecdotal evidence that CHEMEX made supreme infrastructure for your cup of joe.
I had mostly experimented in the past with different types of coffee, but not enough with the different methods by which it can be made.
For example, adjusting the size of your coffee grounds makes a profound difference depending on how you’re brewing.
Changing the water temperature makes a remarkable impact on the taste of the coffee as well as its chemical makeup.
I’ve now made enough cups of coffee in the CHEMEX to make the following statements:
I can now produce a top quality cup of coffee on command with something near a 100% hit rate
CHEMEX produces an outrageously high quality pour-over coffeemaker for an exceedingly reasonable price. It’s actually difficult to make a bad cup in the CHEMEX if you have even the slightest direction.
Here’s the model I have, but browse the website and see what you like! If you’re a coffee lover, I truly cannot recommend dipping your toes into the world of CHEMEX enough. The non-porous glass makes sure every last drop of goodness is retained ☕️☕️.
You can buy the bonded filters on the CHEMEX website, or, there are stainless steel mesh reusable filters (this one is really high quality).
I do realize this comes just a few editions after I spoke about becoming a tea drinker to reduce my coffee consumption. That is still true!
If my morning cup of coffee is of extreme quality, I’m satisfied and can ease into an afternoon cup of tea more easily 🫖🍵🫖.
In Recent Times…
This past weekend I had a brief sojourn in Pittston, PA (near Scranton). Each year, some buddies and I help my friends father crush grapes for his wine-making hobby.
I particularly love this weekend for many reasons, but one of the paramount factors is the opportunity to spend time with this group of friends. They’re all a handful of years older than me, and always I find that there’s wisdom (or at the very least, knowledge) in a lot of what they say.
Especially as a young student at Drexel University in Philadelphia, I gained much by simply spending time with this crew.
As I drove home on Saturday afternoon, I was pondering how even a few extra years of living on this earth affords someone a very superior dataset of experiences to draw from 🤔.
This is mostly true when two people engage in similar activities.
Consider my real-life scenario of spending time with college friends who have vast experience in Philadelphia and the surrounding area, either while they were growing up or after college. The likelihood that I would gain wisdom that’s practical in my life just from hearing their experiences is quite high!
Contrast that with a situation where I’m spending time with a hypnotist from Alaska…
While I would absolutely love the opportunity to meet a hypnotist from Alaska (I’m being completely serious), I don’t know that what I would learn is super practical in my own pursuits.
On the flip side, I could be much older than the hypnotist, and it’s exceedingly possible they wouldn’t learn a damn thing from me that is impactful on their life journey.
Of course, there are exceptions to these rules. Some people are full of wisdom from a young age, and have the ability to pass that wisdom across disciplines through the use of principles.
Conversely, some people will never be wise… no matter how big of a dataset they have to draw from 🤷🏻♂️.
Speaking of wisdom… do you think that even one thing in each edition of Ramblings, Readings, and Rebounds could help you become a wiser person? If the answer is yes, please consider subscribing! It’s 100% free, and you can communicate with me directly in the comments section, or reply to my emails. You’ll get one edition each week with the occasional bonus content.
Readings of the Week
“How China's "debt traps" actually work” by Noah Smith
A classically great piece from Noah Smith that breaks down the specifics of China’s Belt and Road initiative.
…what China would typically do is loan countries money to build infrastructure projects. China’s government would then help plan those projects. Then the borrowing country would use the money it borrowed from China to build the infrastructure, often paying Chinese contractors to do the actual work.
From China’s perspective, even setting aside the security and diplomatic benefits, this looks like a pretty great deal — at least in the short term. Your contractors get to book massive amounts of revenue, and then your government gets its money back when the recipient country pays back the loan. And the loan is typically collateralized by the infrastructure being built, so if the recipient country doesn’t pay you back, at least you now own a piece of infrastructure in a foreign country, and your contractors got some pork.
I highly suggest subscribing to Noah’s content on Substack.
“America's Economy Landscape: State by State” by Amara and Min Hui of Genuine Impact
This was a quick read that unpacked key economic conditions in each U.S. state in a shockingly simple manner using effective visualizations.
Junto Club ♣️
This week, let’s visit question number one of Ben Franklin’s Junto Club…
Have you met with anything in the author you last read, remarkable, or suitable to be communicated to the Junto? Particularly in history, morality, poetry, physics, travels, mechanic arts, or other parts of knowledge?
I’m cheating a bit here, because this isn’t the author I’ve “last read”, but I wanted to revisit some philosophy I read in the last year from Marcus Aurelius.
In Meditations, Aurelius shares a handful of quotes that have personally helped me build a framework around principles I’ve felt, but had never taken the time to define in a meaningful way. Here is one I quite like:
The impediment to action advances action. What stands in the way becomes the way.
There are a few truths that these words help to illuminate, but for me, it serves as a basis from which we can turn obstacles from something negative to something positive.
A significant portion of what we learn in life is due to running into an obstacle.
You learn to drive because you can’t get from A to B effectively.
You learn to read because you can’t gain knowledge efficiently.
You learn to get along well with others because you have at times struggled to do so in the past.
This lens helps us transform obstacles into opportunity for growth.
Importantly, one can (and should) view this quote from the standpoint of building self-esteem and confidence.
If you can’t overcome obstacles, why should you be confident when presented with one? The more we seek out obstacles, the more we will overcome, thus, landing us in a place of self-assuredness.
I’m not advocating to seek out unnecessary or unhelpful obstacles, but I am advocating to step out of your comfort zone in areas that have propensity to provide some benefit.
Maybe trying some new cuisine is a fun way to get started? 🤔🤔. Let’s harken back all the way to RRR1!
If you like to eat out sometimes, try a cuisine type you have never had before! Subjectively, highly routine eating habits seem to be a pervasive issue. Do you think people from other places love to eat food that tastes bad? I promise you they don’t!
Peru and U.S. Agree to $20M Debt for Nature Swap 💸➡️🏔🌳
Full details can be found here.
The agreements will reduce Peru's debt payments to the United States Government by over $20 million over the next 13 years. The Government of Peru will redirect the payments they would have otherwise made to meet their debt obligation to a conservation fund that will provide grants to protect and restore the country's tropical forests. Local NGOs will use these grants to support projects that directly benefit the Peruvian Amazon and the people of Peru.
This news got me thinking about a couple of things… 🤔
Why does Peru owe money to the U.S. in the first place?
Is there anything “in it” for the U.S.?
The answer to question number one has proven quite difficult to find…
In an attempt to get close to the truth, I stumbled across many related, but not entirely useful pieces of information. This, from the U.S. State Department:
U.S. Assistance to Peru The Department of State and USAID provided $240 million in FY 2022 foreign assistance to Peru, including $100 million in humanitarian assistance and $140 million in development, security, and health assistance. The United States and Peru enjoy strong cooperation across a range of shared priorities, including the rule of law; safe, secure, and humane migration management; human rights; and inclusive socio-economic programs.
This doesn’t really help answer my question too much because the “terms” of this “assistance” are not given.
Is this unconditional aid? Are these loans? Grants? A mix of both? The state department did not disclose those details unfortunately.
My sister suggested it could be related to the runaway growth of external debt in developing countries that occurred in the 1980s:
The issue among developing countries took prominence in August 1982 when Mexico declared that it could no longer meet the repayments on its external debt. In the following decades, many of the poorest countries in the world had to make sacrifices in key areas of public spending (sometimes called austerity measures) in order to service their debt.
And more…
In 2010 the total stock of external debt for all developing countries stood at approximately $4 trillion, according to a World Bank study, an amount that represented 21 percent of the gross national income (GNI) of these countries; in the developing countries of Europe and Central Asia alone, external debt was 43 percent of GNI.
Possibly most interesting, was that a lot of this debt spiraling can be traced back to OPEC.
The origins of developing-world debt crisis can be traced to the oil-price shock of 1973–74. At the time, the member states of the Organization of the Petroleum Exporting Countries (OPEC) limited the supply of oil, which resulted in a huge increase in its price.
That had a significant impact on all importers of oil, including many newly independent countries in Africa.
The excess profits that OPEC members received were then invested in the Western commercial banking sector. The banks then sought to find new borrowers to lend that money to.
Developing countries, which were in need of development assistance to soften the impact of increased oil prices, were considered a sensible and safe option by the banks.
That meant that during the second half of the 1970s, a significant proportion of the flows of capital to the developing world came from commercial banks.
That flow of funds from OPEC-member states to commercial banks and then on to developing countries has been described as petrodollar recycling.
Petrodollar recycling as a cause of a global debt bubble in developing countries… Not exactly what I expected to find when I was looking into how Peru owed the U.S. $20M, but I’ll take it! This is why we read 📚.
I also could not find an answer to the question of why do this if you’re the U.S.
I mean… saving the Amazon is pretty cool, and I’m glad that the money is being spent this way. But viewed through the lens of conflict theory (which I adhere to, to an extent) and the lens that shows America as a self-interested actor (isn’t it?), I couldn’t quite buy that the U.S. is just giving back $20M to replenish the Amazon.
However, after doing a lot of research, the best conclusion I could come to is that the U.S. is indeed trying to be a force for good here.
For what it’s worth, Google’s “Bard” thought the same thing…
The last thing we need to know is that this type of deal is not uncommon.
The Peru agreement marks the 22nd TFCCA deal, following agreements with Bangladesh, Belize, Botswana, Brazil, Colombia, Costa Rica (two agreements), El Salvador (two agreements), Guatemala, Indonesia (three agreements), Jamaica, Panama (two agreements), Paraguay, Peru (two agreements) and the Philippines (two agreements). Over time, these debt-for-nature programs together will generate more than $380 million to protect tropical forests.
Good on the U.S. for making this investment in humanity! That is, until I find evidence that shows me it isn’t that simple…
NBA Over/Under Tracker Pt.1
We’re getting dangerously close to the start of the season, which means there will be a slightly greater focus on NBA content in the short-term. As a reminder, opening night is Tuesday, October 24th with a highly appetizing two-game slate.
As I mentioned last week, I do not gamble on sports with any regularity, or in a way that would:
Cause me to start caring about sports / games that I otherwise would not care about
Begin a pattern of consistent or unhealthy wagering on sports
Sports gambling is generally a bad thing to do, and anecdotally I have seen it cause more grief than happiness for those who partake in the practice consistently.
The one thing I have ever dabbled in, would be NBA over/under regular season win totals. I find that the extremely long time horizon helps me avoid thinking about my wagers too much, and takes a lot of the weighting out of individual games, so that I’m not compelled to watch when I otherwise wouldn’t.
I naturally watch lots of NBA basketball (it’s sort of the only TV I watch 🤷🏻♂️) so my season-long wagers don’t force me to spend time doing anything I’m not already doing.
Now that my disclaimer is out of the way, let’s set the stage for pt.1 of our over/under series!
Last Seasons Results
Thankfully, I got some awesome results last year thanks to some very high confidence plays.
I went long on the Sacramento Kings, who broke the longest playoff drought in NBA history after 16 seasons without an appearance.
I went super short on the Charlotte Hornets, who somehow had their o/u line set last year at 33.5. They finished well under at 27 wins, even with a strong finish to their season.
Some other highlights include…
Cleveland Cavaliers over 48.5 wins
Denver Nuggets over 49.5 wins
Sacramento Kings to make the playoffs
Philadelphia 76ers to be a top 4 seed in the Eastern Conference playoffs
Miami Heat under 48.5 wins
Portland Trailblazers under 39.5 wins
Washington Wizards under 35.5 wins
I lost out on my long positions in both the Minnesota Timberwolves and New Orleans Pelicans… thanks, Zion Williamson!
Overall, I made 83.6% on the wagers. Let’s now dive into why that won’t happen again.
Current Landscape
The NBA, in my opinion, will be much harder to predict this year, due to the large amount of teams who will rightly feel like they have a chance to compete. When a team feels they have no ability to fight for any meaningful success, they often engage in what’s called “tanking”.
Essentially, it means stripping the roster of high level talent (or resting players), and looking to rebuild through the draft or by compiling assets (usually young players and future draft picks).
This year we won’t see nearly as much tanking for many reasons.
Primarily, it’s because the NBA talent pool is now such that it supports lots of parity in the competitive landscape.
This means that more teams will gravitate towards .500 basketball, where they win half the time and lose half the time. To determine who will win lots of games, and who will lose lots of games is now significantly harder than it was last year.
For the purposes of wagering, the o/u lines are set very similarly for lots of teams, especially in the Western Conference.
Early Over/Under Wagers
With all that out of the way, here’s what I’ve got so far (wagers followed by my thesis). Keep in mind, and NBA season is 82 games long, meaning 41 wins would be .500 basketball or a 50% winning percentage.
Indiana Pacers over 37.5 wins
Indiana Pacers over 41.5 wins
Indiana will benefit from playing in a weaker Eastern Conference. In addition, I think their lead ball handler, Tyrese Haliburton, is a superstar that can propel them to unexpected levels of success, on an earlier timeline than others think. Lastly, I believe they have an underestimated amount of roster depth, meaning they have lots of quality NBA rotation players that can contribute to winning basketball.
Memphis Grizzlies under 45.5 wins
Memphis Grizzlies under 42.5 wins
Memphis is without their all-star point guard Ja Morant for the first 25 games of the season while he serves a suspension. Memphis supporters will point to the fact that they have had a good record in prior seasons when playing without Morant, but I think they may be missing the fact that Tyus Jones is a top caliber backup point guard who is no longer with the team. In addition, their best perimeter defender just signed a new contract with the Houston Rockets (I did speak ill of this player in a previous post in RRR, to be fair, but situations and team needs matter). In addition, I think the Western Conference is going to prove a difficult place to find wins this year. As a result, I expect Memphis to take a step back this year in the regular season.
Dallas Mavericks over 44.5 wins
Dallas Mavericks under 6.5 seed in the Western Conference
This means they will finish in 6th place or better
Dallas flamed out of last season in spectacular fashion after making a high-profile trade for controversial superstar Kyrie Irving. With that being said, I think experts are underrating how much of their struggles were due to poor perimeter defense. Dallas addressed these needs in the offseason, bringing in young players and veterans who can defend at the wing positions. Combine that with the fact that Luka Doncic and Irving will have more time to build chemistry together as a potent backcourt tandem, I would be surprised if the Mavericks didn’t have a much better season.
Toronto Raptors under 36.5 wins
Toronto Raptors over 10.5 seed in the Eastern Conference
This means they will finish in 11th place or worse
Toronto has a roster built to defend well but not score effectively. This was also the case last season. Since then, they lost their best playmaker on offense, Fred VanVleet, to the Houston Rockets. My thesis is simply that their offense will sputter too much to support winning basketball.
Philadelphia 76ers under 49.5 wins
Sincere apologies to our strong Philadelphia cohort here in RRR… 😅
The bottom line here is that I think Philly has too much negative momentum to overcome. Reigning league MVP Joel Embiid has put up with so much disfunction around him in the last five seasons. There is no reprieve for him as starting point guard James Harden has been campaigning all offseason to get traded, after having bad blood with the teams general manager. This is compounded by the fact that Harden doesn’t seem to be commanding anything close to a robust trade market, meaning their return will likely not help them too much with winning games this season. I think there’s a strong possibility Philly takes a massive step back this year, while they try to figure out the direction of the organization in the coming years.
I’ll certainly be back with more before the season begins 🏀🏀🏀.
Thank you all so much for tuning in, I hope you’re enjoying a fantastic weekend.
Let me know what you think of RRR11 in the comments, or respond directly to this email if you’re viewing this post in your inbox!